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| Sunday, 5 December 2004 |
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The national Export strategy-2004-2008 by Lloyd F Yapa The National Export Strategy (NES), 2004-2008 prepared by the Sri Lanka Export Development Board (EDB) made its debut a month ago without much fanfare. However, it is an important document worthy of the attention of all policy makers, professionals and members of the public for the simple reason, that it is expansion of exports, to be more specific, expansion of international trade, which offers a small country with a small domestic market like Sri Lanka an avenue of escaping poverty within a few decades, as demonstrated by countries such as Singapore, Taiwan and South Korea. Even large countries like China have taken to it with spectacular results. So much so, that it is now accepted, that (international) trade is the engine of (economic) growth. No strong case for export development Unfortunately the NES does not make a strong case for the adoption of an export strategy. Any development strategy has to be sold to the beneficiaries and the authorities concerned. The politicians and the policy makers as well as the public need to be told, why the country should adopt the strategy and what is in it for them to motivate them forward. Vision or strategy ? The vision of the NES is "to make Sri Lanka a country of export excellence and a strong competitor in the international market". Achieving export excellence and competitiveness are strategies and do not constitute a vision of the future or an outcome desired by the people. It has to be written, using simple understandable words, so as to inspire the people to strive continuously towards such a situation. The statement made by Deng Tsiao Ping of China in the late seventies, that "it is glorious to be rich", for example, galvanized a nation of well over a billion people to scramble out of dire poverty into prosperity in a matter of 25 years or so. In an official report, where it may be inappropriate to resort to such slogans, it is more useful to indicate a goal or outcome desired, leaving the slogans to the leaders. Objectives or strategies? No such goal is indicated in the NES. Even the objectives talk of productivity, competitiveness, value addition and an export culture, which are all strategies rather than objectives. The objectives have to be indicated in quantitative terms to enable the formulation of appropriate strategies and activities along with the resources required to hit the targets and to make it easy to monitor implementation. An export target of 15% per annum in US Dollar terms is mentioned elsewhere to contribute to the envisaged national economic growth rate of 8% p.a., without indicating the required investment target, which is more helpful to the policy makers and businesses, as they could align their policies, programes and projects to the desired outcome. It is estimated, that an overall investment of $ 7-9 billion per annum (or 30-40% of GDP, compared to the present level of capital formation of about 25% ) has to be made by the nation to achieve a rate of growth of 8% p.a in the medium to long term. A wish list Having indicated in the clearest possible terms, where to go, a plan has to derive the strategies out of an analysis of internal and external factors, which impel or impede the achievement of the goal. The number of strategies has to be as few as possible and has to be confined to the high impact areas to make it easy for the politicians, policy makers, officials and the public to read them and internalize or 'own' them, so that they instinctively align their daily decisions and actions to the strategies to achieve the goals and targets. Shortest possible route to prosperity If too many strategies are proposed, it becomes an overlapping and unwieldy wish list, (rather than a strategy), that cannot be programed into the minds of people or be translated easily to action and resources required. The NES lists 20 "strategic approaches" , 9 "strategies for cross sector issues", not to mention the various strategies proposed for some 27 sectors! A wish list also prevents certain key strategies being dealt with in detail.A key strategy used by most of the high performing economies of Asia, for achieving double digit growth rates and alleviating poverty within a couple of decades has been the created a climate conducive to attracting Foreign Direct Investments (FDIs), which act as the medium for transfer of the necessary technologies, managerial skills and knowledge of markets in addition to the capital. Sri Lanka stands to reap rich rewards by adopting such an approach, as the country cannot command the wherewithal, that FDIs can transfer and also because most firms in the country are comparatively small and are far less competitive. In the NES, the attraction of FDIs occupies the low position of number 10 in the list of strategic approaches and does not receive the emphasis it deserves. To repeat, the main strategies of creating such a climate for foreign (or local investors) are just a few - social and political stability, economic stability (characterized by low inflation, low rates of interest, stable exchange rates, open and competitive land/ labour markets), a high level of tertiary skills, (not just high literacy), world class infrastructure, an efficient public service, a fair and effective system of justice- law- order and governance. The country had attracted only $ 1.5 billion worth of FDI from1980 to 1997. Praiseworthy The BOI plan indicates a target of $ 1 billion FDI in the year 2006 only (and of achieving export earnings amounting to $ 6 billion through BOI projects only by 2006 !) How this investment is related to the export target of 15% is not explained nor the investments required for the rest of the years. The praiseworthy aspect of the NES, however, is that the EDB and the 'Core Team' have successfully accomplished the difficult task of identifying the constraints confronted by some 27 sectors in agriculture, industries and services, making recommendations to resolve them and assigning the latter to the agencies concerned for implementation. Shorter version Nevertheless a shorter version of the NES, on the lines suggested, is in order to catch the eye of the leaders and the policy makers, as export development to be effective has to receive the direct intervention and commitment of the highest levels of leadership. Wider circulation of this shorter version not only in English but also in the vernacular may also create the necessary public opinion for the implementation of the recommendations. |
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